Public Bill Committee

[Mr David Amess in the Chair]
Written evidence to be reported to the House
PS 18 Royal Mail Group

Schedule 1 agreed to.

Clause 9

Question proposed, That the clause stand part of the Bill.

Nia Griffith: I shall speak briefly about clause 9, which is helpful in many respects. I am sure that the intention is to ensure that the protections set out in the Transfer of Undertakings (Protection of Employment) Regulations 2006—commonly known as TUPE, which is much easier to say—apply to staff affected by the reorganisation of companies within Royal Mail Holdings plc before the sale to the private sector of any part of Royal Mail Holdings plc.
The staff of any organisation are its greatest asset, but they are particularly important in concerns that have a high public profile and that are labour-intensive and people-focused. I am talking about concerns for which interaction with the public and customer satisfaction are of paramount importance. It is vital whenever we are discussing this Bill—or, indeed, any other Bill—that although we want the best possible service for the customer at the best possible price, we do not seek to achieve that by ignoring the rights and situations of those whom we ask to provide that service. Whatever our views on the best way to ensure the future success of the business, we want to see that the staff are treated fairly and will not lose out in the upheaval likely to accompany any reorganisation. They will be living through a period of great uncertainty and anxiety. The next few months and years will be a difficult time, because change is never easy.
Clause 9 is important, because it is about the treatment of the staff affected by the reorganisation of companies within Royal Mail Holdings plc before the sale to the private sector of any part of Royal Mail Holdings plc. Many of those staff will have given long years of service, and it is pleasing that subsection (7) specifies that any transfer of staff during the reorganisation will not be treated as a break in service and that any period of employment with their current company, referred to as “the transferor”, is to be treated as a period of service with their new company, referred to as “the transferee”.
All staff deserve proper protection for their existing terms and conditions, and we must ensure that they receive nothing less. That is why we welcome clause 9, which ensures that the protections set out in TUPE apply to the staff affected by the reorganisation of companies within Royal Mail Holdings plc. However, I need reassurance from the Minister that there will be no attempts to water down the protection offered by TUPE. I need reassurance from the Government that they really understand the importance of protecting staff terms and conditions at a time of transfer or takeover.
I wonder exactly how much homework the Minister has done. We owe TUPE to the EU and the acquired rights directive, and although that measure allows the free movement of capital, the human aspect is not ignored. People are not seen as numbers but as having homes, families and financial commitments. Given that TUPE is the UK transposition of the EU directive, it would be difficult to change what it covers except at the edges, where UK law extends beyond the directive or implements its optional provisions.
We need an assurance from the Minister that the Government still recognise the importance of the sort of protection offered by TUPE, or similar guidelines such as the Cabinet Office statement of practice on staff transfers in the public sector, and that no attempt will be made to water down the TUPE commitments through Government amendments or new clauses. The regulations are designed to protect the rights of employees in transfer situations, enabling them to enjoy the same terms and conditions that they had before the transfer took place and with continuity of employment.
We also have the trade unions. If an independent trade union has been recognised by the transferor in respect of transferring employees, that recognition should transfer to the incoming employer to the same extent. I hope that the Minister will not find it difficult to confirm that no attempt will be made by anyone during this reorganisation process to de-recognise the trade unions or to sideline them. What steps has he taken to talk with trade unions about set-ups that might emerge?
The outgoing employer or transferor must inform staff, consulting them and appropriate representatives of the affected employees about the transfer and proposed measures. Specified information must be provided to employee representatives long enough before the transfer to enable the outgoing employer to consult them about it. Will the Minister confirm that such consultation will happen, and that the work force and their representatives will have a full and proper opportunity to participate? Any changes or proposals for change following the transfer will have to be discussed with the representatives of the affected employees.
There is no set timetable for consultation, but the larger the transaction the more staff will be affected and the longer the timetable will need to be. Is the Minister confident that the necessary preparations are being made? Will he ensure that the best outcomes are there for all staff involved in this substantial reorganisation?

Edward Davey: Good morning, Mr Amess. I welcome the hon. Lady’s speech, and thank her for her positive comments. She made it clear that the Opposition regard the clause as helpful and that, in general, they welcome it. Her questions were extremely reasonable, and I hope that I can give her comfort on those points.
I am delighted that the hon. Lady recognises the protections being introduced in clause 9. Similar provisions were made in the 2009 Bill. It is important that the Transfer of Undertakings (Protection of Employment) Regulations, commonly known as TUPE, will apply to staff transfers in this case, but it is important to give some context on how the staff transfers might operate. Because we are restructuring and reorganising Royal Mail Group so that Post Office Ltd will no longer be a subsidiary of Royal Mail Group Ltd, we must ensure that the staff involved will be protected during the reorganisation.
Currently about 8,000 personnel who work in the Post Office are formally employed by Royal Mail Group, but are seconded to the Post Office. It is important that they should be protected when they are transferred from secondment to become formal employees of the Post Office. We hope that the clause will make it clear that their interests will be taken into account.
I assure hon. Members—the hon. Lady did not make this point, but it should be underlined—that although certain occupational pension rights do not transfer under TUPE it is intended that the historic pensions of those who work at Post Office Ltd will be protected in the same way as those of people who work for Royal Mail under part 2 of the Bill. I am sure that we shall reach those provisions this morning.
The first step in the process of reorganisation will be agreement between Post Office Ltd and Royal Mail Group Ltd on the transfer arrangements. That would be normal way of things, as they reorganise themselves. The Secretary of State will then designate certain contracts of employment or employees covered by that agreement. The effect of that designation is to confirm that once the agreement comes into force, TUPE will apply in respect of the arrangements so designated, so that the legal protections that come from the EU, as the hon. Lady has mentioned, will apply.
The TUPE regulations require the employer to inform staff representatives of the affected staff about the prospective transfer and consult them on any measures affecting them that the employer envisages taking in connection with the transfer. That is the consultation point to which the hon. Lady rightly referred. TUPE makes it clear that there should be both information and proper consultation, which is one reason for our wanting the Bill to contain crystal clear confirmation.
The hon. Lady worried about whether there were plans to de-recognise the trade union or somehow sideline it. I assure her that that will not happen; it is not our intention to do that. I am not often given the credit for it, but I, and other Ministers and officials, engage regularly with the Communication Workers Union and the National Federation of SubPostmasters. If it is of interest to the Committee, I will detail the meetings that have taken place with the CWU and talk about other meetings that have taken place. I want to reassure the hon. Lady that we are engaged with the trade union and want to continue to be so. Of course, it is not just the CWU that is involved, but Unite, which we have also met.
By way of examples, on 7 June there was a meeting between the CWU and the Secretary of State. On 3 August I met the key officials of the CWU. On 31 August there was a meeting of officials and the CWU about pensions. It should be borne in mind that many of the pension regulations are a throwback to the 2009 Bill, on which there was consultation. Those provisions are not new but have been developed with the trade union.
On 9 September I had a meeting with the trade union. Then there was a wider stakeholder briefing session, which the CWU attended on 20 October and 3 November, and on 8 November there was another meeting of officials, covering post offices, pensions, employee shares and regulation. There are planned future meetings. On 29 November, there will be a meeting at the request of the CWU to discuss post offices, pensions and regulation, and a meeting with me is scheduled for 16 December.
I hope that the hon. Lady will see that that is quite a list of engagements. I have made it clear to the general secretary of the CWU, Mr Billy Hayes, that I am keen to meet him and his deputy, Dave Ward, almost as often as he would like. It is often difficult to get diaries—mine and theirs—sorted out, so that can sometimes get in the way. I should probably tell the Committee that Mr Dave Ward is a constituent of mine, living in Chessington. We hope to meet up for a drink before Christmas in the North Star in Hook. We try to ensure that we can meet in all the different forums.

David Wright: I am not suggesting that I should join the Minister, but I am happy to do so if he would like to invite me.
I reassure the Minister that my intervention is intended to be constructive. How will the management of the modernisation process knit in with the discussions about TUPE? Clearly, as the organisation changes up to any potential transfer, it is important that we get our ducks in a row on the style and nature of the modernisation programme and on what actually ends up being transferred in terms of contracts and the related structure.

Edward Davey: That was a helpful intervention and, in that spirit, I am almost inclined to invite the whole Committee to the North Star. However, perhaps we should come to that in the later proceedings. [ Interruption. ] I will not comment on who is paying.
The hon. Gentleman makes a fair point. Clearly, such issues are part of modernisation, but let us be clear that the modernisation programme is separate from the process that underlines the clause, which deals with the reorganisation required as we move the transaction forward and separate Post Office Ltd from the Royal Mail Group. That process could continue while modernisation is under way.
The trade union, the CWU, has played a constructive role in the modernisation agreement—I have said that on a number of occasions and am keen to underline it. If that constructive approach is seen, which I am sure it will be, as the consultations under TUPE happen, I am certain that there will be no problem. If there are concerns, I am sure that CWU officials will raise them with me or my officials.
The hon. Member for Llanelli was kind enough to welcome subsection (7), making it clear that a break in service length would not count against an individual. That is clear in the text and shows that there is no attempt to water down the protection in TUPE. She suggested that she has worries about that, given what the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Ruislip, Northwood and Pinner, said in a completely different context. I am happy to reassure her on that point.
The hon. Lady also wanted to know whether I am confident that preparations are under way. One has to be careful, because preparations are undertaken by the Royal Mail Group but the Bill has not passed this place and received Royal Assent. I am sure that people in Royal Mail Group are thinking about the implications and making plans, but it would be wrong for me to second-guess or to say what they should be doing, given that the House and the other place have not yet consented to the clause and the Bill. Nevertheless, a number of processes go on in such a complicated transaction and, as the hon. Lady will understand, it is a complicated process even after Royal Assent, so I am sure that people are thinking about implementation.
I think that I have covered all the points made by the hon. Lady. It remains for me to say that the clause is about ensuring that staff whose formal employment arrangements will be transferred to Post Office Ltd retain the same rights as they had under employment contract with the Royal Mail Group. That has brought the Committee together, so I recommend the clause.

Question put and agreed to.

Clause 9 ordered to stand part of the Bill.

Clause 10 ordered to stand part of the Bill.

Schedule 2 agreed to.

Clause 11

Michael Weir: I beg to move amendment 3, in clause11,page6,line22,leave out ‘the company’s’.

David Amess: With this it will be convenient to discuss the following:
Amendment 4, in clause11,page6,line22,at end add—
Amendment 33, in clause11,page6,line26,at end insert ‘and
Amendment 36, in clause11,page6,line26,at end insert ‘and
Amendment 37, in clause11,page6,line26,at end insert ‘and
Amendment 38, in clause11,page6,line26,at end insert ‘and
Amendment 48, in clause11,page6,line26,at end insert—
Amendment 49, in clause11,page6,line31,after ‘small’, insert ‘and medium’.
Amendment 5, in clause11,page6,line38,at end add ‘and the Government must set a date for a debate on the report on the floor of the House within five days of the report being laid.’.
Clause stand part.

Michael Weir: I will speak to amendments 3, 4 and 5, which stand in my name. Although they are short amendments, they are important for the future of Post Office Ltd.
Amendment 3 is fairly minor, but is necessary to avoid confusion. As a former lawyer, I have spent many happy hours arguing about the exact meanings of words and phrases in documents, and about the consequences of misplaced or wrongly used words. The wording of the clause means that the company must give, as part of its report to Parliament, details of “the company’s post offices.” I do not ascribe any evil intent to the Minister in using those words, and I am sure that the intention behind the clause is simply that the company will be obliged to list all the post offices and sub-post offices in operation when the report is drawn up. However, that is not necessarily what the clause says.
In the evidence sessions, we heard about the different structures within the post office network. Crown post offices are run directly by Post Office Ltd, many independent businesses contain a post office as part of the business and, as I have mentioned, in the last round of post office closures many stand-alone post offices were closed and amalgamated with other businesses, such as WH Smith, the Co-op and small, local businesses. The main post office in Arbroath, in my constituency, was a large premises in a covered shopping centre. It was closed and transferred to a small part of a newsagent in the high street. A similar process happened some years ago in Montrose, where the post office was transferred from a stand-alone building to part of the Co-op supermarket. The supermarket has since downsized severely and is now a convenience store. That has left the main post office only a small part of its floor space.
The point I am trying to tease out is whether such post offices are “the company’s” or whether, as franchises, they might be regarded as not the company’s property, because they are not directly operated by the company. One reading of the phrase “the company’s post offices” would restrict the meaning to stand-alone post offices that are operated directly by Post Office Ltd. I am sure that the Minister, in his inimitable style, will dismiss that concern.
However, I draw the Committee’s attention to the evidence of Moya Greene, the chief executive of Royal Mail, from our first sitting:
“For me it is unthinkable that we would not have a very long-term relationship with the Post Office. Here is a group of people—the best and strongest network in the country, by any yardstick, with 11,900 outlets—who are committed to and want to sell our products…To me it is unthinkable that we would ever have anything but the very strong relationship that we have now with the Post Office. I admire our other partners like WHSmith; of course I do. But that is not the Post Office.”––[Official Report, Postal Services Public Bill Committee, 9 November 2010; c. 18, Q42.]
That is a significant statement. In many communities, operations such as WH Smith are the post office. On Tuesday, the hon. Member for Folkestone and Hythe said that his local post office in his constituency was in WH Smith. In Aberdeen, the main post office is in WH Smith. As I have said, in my constituency there are post offices in the Co-op and in a local newsagent. It is interesting that Ms Greene makes that distinction. It appears that she sees the Post Office as those branches that are run directly by Post Office Ltd. The clause might therefore be read to mean only those branches. We need to know from the report to Parliament how many post offices and sub-post offices there are in total, whoever runs them and wherever they may be.
To emphasise my point, I direct Committee members to the memorandum that we received yesterday from Royal Mail Group. Paragraph 14, under the heading “The Role of the Post Office,” states:
“Post Office Ltd is a separate company within the Group. It derives substantial revenues from financial services and Government services as well as retailing postal products. A third of Post Office revenues relate to postal products. Its structure is different—with 97% of post offices operated and owned by local business people, working through agency agreements with Post Office Ltd.”
As I said at the outset, I am not saying that there is a Machiavellian plot by the Minister to avoid telling Parliament the true state of the post office network and I am sure that his intention was not what I have described, but I ask him to consider the provision in more detail, because there is an opportunity for confusion in it and Parliament may not get the full information that we will require, if the Bill is passed, to ensure the future of our post offices, which are so important to our communities. Before the Minister rejects the amendment out of hand, I ask him to consider accepting it, because it could avoid an embarrassing situation arising later on.
Amendment 4 in many respects runs on from the points that I have made on amendment 3. As we all know, in many areas, particularly rural areas, very few post offices are now stand-alone businesses; they almost always form part of a larger business, but often form an important part of that business. In many of those set-ups, neither the post office business nor the other part of the business would succeed on its own, but together they form a reasonable, if often hardly very profitable, business.
We have heard a great deal in Committee about the need for local post offices to diversify to enable them to have a greater business base. It should be borne in mind that many of the remaining sub-post offices are not stand-alone sub-post offices but are coupled with a shop—often the only shop left in the community. Indeed, I can think of only two post offices in my constituency that are not part of another business.
Efforts have been made to make post offices more viable. I have referred in previous debates to the Scottish Government schemes. The business bonus scheme provides rates relief to businesses with properties in Scotland that have a combined rateable value of £18,000 or less. The rural business rate scheme offers further relief. As a result of the scheme, all properties with a rateable value of up to £10,000 pay no business rates; those between £10,000 and £12,000 get relief of 50%; and between £12,000 and £18,000 the relief is 25%. Those with more than one property can get cumulative relief; if cumulative values go up to £25,000, they can get 25%. The scheme has been a huge boost to small businesses in constituencies such as mine and has also helped many of the surviving post offices by substantially cutting one of their major costs.
In addition, the Scottish Government, like the Welsh Assembly, have launched a post office diversification fund, which has recently made awards totalling £1 million to help post offices to diversify and launch new business activities to strengthen the vital role that they play in our local communities. In Scotland the fund opened in July, with 49 post offices in 22 areas bidding successfully and receiving awards of up to £25,000. Examples of the diversification schemes approved include the setting up of an internet café and the selling of local produce.
I remind hon. Members of what George Thomson of the NFSP said in our evidence session on the matter:
“I know that in Scotland, for example, some people are saving £4,000 or £5,000 a year, which is a massive help—saving £100 a week—to keep their business on the local high street.”––[Official Report, Postal Services Public Bill Committee, 9 November 2010; c. 33, Q76.]
To ensure that Parliament gets a full and accurate picture of the health of our post office network, we must have the information on the nature and extent of any business being run in parallel with the post office business. We may not be dealing with a post office standing alone. It could be a post office that is part of a village shop. It could be the only shop in the village. Perhaps it is part of a pub or even the local fish and chip shop. Those are all important aspects. I am not suggesting that we need to know, for example, the financial health of the businesses. Much of that information will be confidential to whoever runs the business. However, we need to know exactly what we are dealing with in respect of post offices and the impact that those post offices have on local communities throughout the United Kingdom.

Richard Fuller: I am listening with interest to the hon. Gentleman’s point. When I receive this report, as a Member of Parliament or a member of the public, how can I interpret whether or not a post office is running parallel businesses? Is the fact that it is a sign of its strength or a sign of its weakness, because it cannot operate as a stand-alone? How am I supposed to interpret the fact that it works as a small shop rather than as a restaurant? How will I interpret this information that will obviously have a cost to collect?

Michael Weir: I am not sure that it will have a cost to collect, because Post Office Ltd will know the information anyway. If Post Office Ltd operates franchises up and down the country, it will know the nature of them. I hope that a properly run company would be in regular contact with its franchisees and know what sort of businesses they are running. I return to my point—it is a point that I have made often in these debates—that the Royal Mail and the Post Office are not just another business. The Post Office, in particular, has an important social function in many of our communities. Effectively, it is part of the building block that helps to make businesses viable. We must understand the impact that Post Office Ltd, which will hopefully continue to be a Government-owned business, has in our local community. How the Member uses that information is up to him, but I suggest that many of us would like regularly to contact the post offices to see how they are getting on with their business. We need to know the overall picture throughout the United Kingdom of how Post Office Ltd is operating in concert with those other businesses.

Edward Davey: In a number of the hon. Gentleman’s speeches during the proceedings of this Bill, he has asked for reassurance from the Government that we will consult. In that spirit, may I ask him whether he has consulted sub-postmasters who run different businesses about his amendment and whether he has consulted the NFSP?

Michael Weir: I have not specifically spoken to the NFSP. As parliamentarians, I feel strongly that if the calamity of the privatisation of Royal Mail is to happen, we need to know how the network is operating. After this Bill is passed, Post Office Ltd will have a completely new structure. The amendment is not particularly onerous. I am asking not for businesses to divulge their financial circumstances but for Parliament to have an overall picture of our post office network: how it operates in concert with other parts of the businesses; how it impacts on communities; and how it operates throughout the country. The amendment is reasonable, and I ask the Minister to consider it.
The final amendment in my name is fairly minor. It seeks to ensure that once a report is laid before Parliament, there will be a chance for Members to debate it fairly quickly. It may well be that that is the Government’s intention, but that is not what the clause says. The phrase “laid before Parliament” can mean many things, from putting a report in the Vote Office and issuing a written ministerial statement through to having a debate. If this Bill goes through Parliament and the disaster of a privatised postal delivery service comes to pass, the only part of the existing Royal Mail Group that Parliament will have any real say in is Post Office Ltd. It is vital that Members have the opportunity regularly to debate the report that is laid before Parliament on the health and well-being of that group and ensure that the Government have kept their promise that there will no post office closures. Such a debate will also include the information that I have already sought in respect of amendment 4.
None of these amendments is earth-shattering, but they would improve the Bill. They would allow a regular debate in Parliament on the health of our post office network. Too often in past years, the only time that we have debated the Post Office is when there has been a disaster, when there are closure programmes and when we are all trying desperately to defend the services in our communities. If we are truly to go forward with a new set-up, there should be a regular debate in Parliament on those aspects of Post Office Ltd, which, as it stands, will remain a Government-owned company—a taxpayer-owned company, I suppose—until such time as it is mutualised, if it ever is. Those are important issues, and, rather than dismissing them, I ask the Minister to consider these amendments and accept that, particularly in the case of amendment 3, they will be helpful in tidying up a potentially difficult drafting error.

Nia Griffith: I will, of course, be supporting the amendments in my name and that of my hon. Friend the Member for Ochil and South Perthshire, which I will leave him to expand upon, but I rise now to speak in support of amendments 3 to 5, which were tabled by the hon. Member for Angus.
Clause 11, which covers the requirement for an annual report on the post office network, is important for checking on the health of the post office network. Although it has always been important to know exactly what is happening, it assumes even greater importance when we know the significant sums of taxpayers’ money that are being invested in the network. I support amendment 5, because, given such significant investment, we want to see strengthened accountability. The amendment requires the Secretary of State to name, within five days of the report being laid, a date on which the report may be debated on the Floor of the House. That, of course, will raise the report’s profile. It will make people aware that the report has not just been shoved on the top shelf to be left to gather dust, but has instead been brought to the attention of hon. Members and that an opportunity has been made available for debate. We hope, in light of more favourable news than has sometimes been the case, that there will be progress towards making the Post Office a successful and viable network—as the hon. Member for Angus has pointed out, it is often a crisis situation that sparks debate.
Obviously, it is particularly pertinent at a time of great change that we know what progress has been made towards making the Post Office financially viable. We heard on Tuesday how the Minister hopes that, by 2015, the post office network will be in a healthy enough state to be mutualised. It is vital, therefore, that we see the progress that is being made towards that goal. I am interested in outcomes, and we need that debate to focus on them. What return are we getting from that investment? We discussed that a little on Tuesday, and we know that about half the allocated money will provide a subsidy for running the network. So what progress is being made towards reducing the need for that subsidy? That is why we want to know the number and location of post offices, and that is why we want to know whether there are any vacancies where one sub-postmaster has shut up shop and no one has yet been found to take over.
Yesterday, George Thomson told the all-party group on post offices that there are currently 900 vacancies in which former post offices were kept as post office locations by Post Office Ltd—they were not down for closure—and yet no one can be found to run them. That is the reason why it so important to have such a report detailing the number of post office locations in the network, so that we can find out whether that figure is diminishing. We know that that is not just a figure, because each of those 900 cases represents a community that has lost its heart. We will want to know whether that figure is being reduced and whether we shall have the pleasure of seeing more post offices reopen, as the hon. Member for Witham described the other day.

Damian Collins: There is an example of that—I mentioned this on Second Reading—in Elham, the village in which I live in my constituency, where the post office closed and its counter service was moved into the local pub. I would be happy to organise a trip for the Committee should it wish to see that in operation. If such a closure and reopening is not reported to Parliament, how is Parliament meant to use such information and help inter-business matters in relation to small local post offices?

Nia Griffith: As the hon. Member for Angus has explained, it is not necessarily about having the detailed business information of each business, but about looking at the network to see whether there are 900 vacancies or whether they have been reduced to 400. We very much hope that they will be reduced and agree with the hon. Member for Folkestone and Hythe that the more partnerships that can be set up, the better. What we want to know is whether that progress is being made. Are there successful models that could be replicated? We might have a second version or a report on the BIS document with details of some outstanding examples.

Michael Weir: Perhaps the answer to the point made by the hon. Member for Folkestone and Hythe is that we also need to see how the network changes over time, which is inevitable. It is important for Parliament to be aware of what is happening to our network.

Nia Griffith: Indeed it is. It will be extremely important to see how that pattern develops and its direction of travel.

Priti Patel: In terms of collating information, the Post Office already does a great deal of work on data collection from the post office network. Would the hon. Lady’s suggestion not place more of a regulatory burden, or a burden of paperwork, on independent businesses that are run by sub-postmasters who have other businesses? They would have to harvest data, collect them and then send them to a third party to compile a report.

Nia Griffith: The clause sets out to do that anyway. It states that the post office network will collate information and produce a report, so the report will be produced anyway. What we are suggesting is that the report should not get stuck on a top shelf, which would mean that it had been a waste of time, and that it should be brought to the attention of the House so that, if we think that certain trends and directions of travel need to be questioned, that information will inform the decision making and the debate about where we go next. We hope that it will be a good news story and that positives will be reported back. The bulk of that work will be done anyway. The amendment asks for the inclusion of information on partnerships in which businesses are run in parallel to post offices, but the report itself will be written anyway.

Michael Weir: Does the hon. Lady accept that the Government themselves have stated that they wish to see the diversification of post office businesses? It is important that Parliament knows about that diversification.

Nia Griffith: Indeed it is and, for that exact reason, it would be a wonderful example of cross-party—or, dare I say, four-party—collaboration if the Government accepted the amendment on the inclusion of information about businesses running in parallel to post offices. It would be an ideal amendment for the Government to accept, and it would show that we are determined to see the programmes develop and that we anticipate diversification to provide an important instrument for ensuring the survival of the network.

Richard Fuller: The hon. Lady is being gracious in giving way. We are concerned about the burden that collecting information would place on what are already hard-pressed businesses. Everything that we ask of them ought to have a very specific purpose and be specific about what we are collecting. What does the hon. Lady think should be captured so that we can understand
“the nature and extent of any business”?
Moreover, what is the definition of “run in parallel”? Will the information be general or will it be specific?

Nia Griffith: The key question that we want answered is whether a post office would exist without a parallel business. Can it only exist if it is in that sort of partnership, and which is the stronger partner? Is it the business or the post office? We have examples of both situations across the country. There are varying degrees of dependence on each of the components—a little shop, a garage, a post office, a newsagent or everything rolled into one—and the post office proportion of the business will vary.
I can give an example from my constituency of a post office business that is effectively just a post office. An enormous number of residents live close to the post office, and they all use it for their transactions. Its only additional business is selling a few cards. A little further down the road in a different area is the complete reverse: that post office would not exist were it not for the business in which it is placed.

Michael Weir: Does the hon. Lady accept my earlier point that Post Office will have that information anyway? As it implements its diversification programme, its business development managers will be in constant contact with post offices and franchisees. It is not a case that another layer of regulation or lots more information from the franchises is required. Most of that information is available to Post Office Ltd already.

Nia Griffith: Indeed it is. As I mentioned in a previous sitting, in my constituency, Llangennech post office’s diversification programme has led to its winning a prize, but in order to get that prize, as the hon. Gentleman rightly points out, the post office was expected to provide a lot of information. Such information is being gathered, but it is extremely important that we take note of that, observe the developments and see what is and is not working.

Graeme Morrice: What price accountability and democracy? I am concerned by the comments of Government Members, who seem to be putting barriers in the way of the collation of that information and its rightful reporting to Parliament. It is important that the performance of a public or mutualised Post Office is reported to Parliament and that we should be allowed to scrutinise it, not least because we are investing £1.34 billion of public money into the network. It is only right and proper that we should be able to see how that money is being spent.

Nia Griffith: My hon. Friend makes a good point, and one that is made frequently by the hon. Member for Bedford. The taxpayer deserves value for money, and people want to know what return we are getting on that substantial investment. It may be a popular investment, but nevertheless the money must be accounted for. It is right to debate that issue.
We are interested in outcomes. How will post offices be made more viable? That is what we want to evaluate; it would be nice if the Post Office were eventually viable enough to need less Government subsidy. Subsection (2)(b) will be key to the report and debate, because we will want to know what exactly is happening with postal services. Will volumes decline? What percentage of Post Office’s income will still come from postal services? What will happen in respect of the inter-business agreement?
If the Bill comes into force by 2012 and the proposed mutualisation of the Post Office occurs in 2015, the period when the reports are collated will be key for the Post Office. We will want the chance to debate them, because we will want to know what plans are afoot to renew the inter-business agreement with Royal Mail. The few years after the Bill passes will be critical in determining the direction of the Post Office, because we will see during that time what real commitment a privatised Royal Mail is making to honour the remaining period of the existing inter-business agreement, assuming that it is transferred over, and to lay plans for a new one.
The amendment will ensure that the report is brought promptly to the House’s attention and that a date is set for debate. In that debate, we shall be able to scrutinise what services are being provided not only because of Royal Mail volumes but because of arrangements with Departments. We read much in the glossy document, “Securing the Post Office Network in the Digital Age,” about the intention and ambition that the network would become an important counter for a wider range of Government services. As yet, however, there has been little sign of any of those fine words becoming bankable contracts, so we will certainly debate with interest the report on those Government services. We will want to know whether any increased provision of Government services has increased footfall, whether that has led to increased use of other services provided by the Post Office and whether that in turn has increased turnover and profitability. We are talking about a crucial period during which the Post Office might be preparing for mutualisation, and we understand that it needs to be profitable by that time.
We shall also be particularly interested to debate what the Bill refers to as the “other services” provided at post offices. As has been said, we are disappointed not to have seen any fruition of the post bank plans—something that contrasts rather sharply with the commitments we made before the election, and with those that the Liberal Democrats outlined in their manifesto. The truth of the matter is that it is not always easy to set up a business or entice customers to a new stream of business. The Government will have to do some serious thinking on what they can realistically suggest for new business streams.
It seems to me that some of the money that is to be invested in the Post Office will need to be set aside for entrepreneurial activity, namely the development of those new business streams, if the network is to become more profitable. At the moment, it is not clear from those spending plans whether they will focus simply on subsidy and physical and technological refurbishment, nice though that might be. Of course, that might include things that do extend to providing new business, which I hope will happen. The hon. Member for Angus, for example, mentioned the idea of a cyber-café, which was also cited in the Welsh Assembly documentation as a potential use of the funding that it has been provided with, and there is the possible use of things such as photo booths. We know that the inclusion of cash machines in many post offices has helped them. Those are examples of how a refurbishment could also bring new forms of business, and we would hope to see such developments as part of a much more viable network, building on the good examples of the work that has already been done by schemes such as that of the Welsh Assembly Government.
We shall also be supporting amendment 4, tabled by the hon. Member for Angus, which would require the report to include details on the nature and extent of any business running in parallel with the post office. We have discussed that at some length, and I hope that the Government will consider supporting the amendment.
Obviously, it is important that we get that picture so that we know where we are going. We frequently find post offices that are also village shops, but because we are now such a car-centred society, the local garage is replacing the newsagent, so post offices are moving into garages. Things move on and do not remain static. There are new developments all the time. Rather than relying on anecdotal evidence, it would be nice to have the facts and figures for those parallel businesses, and a proper analysis. We need to know the nature of the diversification strategies and partnerships that are developing, which is why amendment 4 is important. We could then debate the report, according to the requirements set out in amendment 5. As we have mentioned, the development money, now called the diversification fund, provided by the Welsh Assembly Government has helped considerably, and they are trying to be creative and to think of new and different ways that another business stream might be included within a post office.
Subsection (2)(c) relates to the accessibility of post offices. In the report that we hope will have to be debated in Parliament, we would want information on how the access criteria are working out. Those access criteria were developed to ensure that communities would continue to be fairly served by a national post office network. I am pleased that the coalition Government saw fit to include those criteria in their recent document, and that they have been transferred en bloc. They provide that 99% of the population will be within three miles of their nearest outlet and 90% within one mile; that in deprived urban areas, 99% will be within one mile; that in urban areas, 95% will be within one mile; and that in rural areas, 95% will be within three miles.
The criteria are most important, but that simple statement of intent has to be made into reality. I refer to the IBA. It would really help to have a signed and sealed inter-business agreement for a minimum of 10 years—or, preferably, a measure in the Bill that would establish a greater number of access points. An IBA with the post office network combined with a definition in the Bill of a greater number of access points would be significant. Again, it is something on which we would like to receive a report. The clause is extremely important not only in providing a report, but in allowing us to debate it.
In order to strengthen accountability and evaluate progress on the role of parallel businesses in securing viability for our post office network, we support amendments 3, 4 and 5 in the name of the hon. Member for Angus, as well as those in my name and that of my hon. Friend the Member for Ochil and South Perthshire. I shall leave my hon. Friend to expand upon the latter.

Gordon Banks: Amendments 33, 36, 37, 38, 48 and 49, in my name and that of my hon. Friend, are important. They build on amendments that we have already debated.
Clause 11 is all about the annual report that a Post Office company has to send to the Secretary of State about its network. Amendment 33 states:
“the locations where post office services are at the time of the report not being provided but which are identified in the Post Office plan as outlet locations”.
The Committee may recall my exchanges with Ms Vennells, when I raised what I expected to be a quick point about the fact that Bankfoot in my constituency does not have a post office and has been without one, I believe, since 2008. That example gives me the perfect opportunity to elaborate on what drives amendment 33, and to expand on its benefit to the annual report.
The amendment would allow us to see how many Bankfoots there are throughout the UK—locations where services should be provided but are not. As my hon. Friend said, we believe that there are 900. This is not a witch hunt; the amendment is intended to be informative as it will provide the public and Parliament with a level of information that is not currently available.
Before going any further, I thank Ms Vennells for being true to her word when she said that she would take up the Bankfoot matter, as I have received correspondence from Sue Huggins, Post Office general manager for network, service and transformation. She has offered to meet me, and I look forward to a productive meeting. I have taken this matter up locally, but without a solution. I am well aware that there can be many reasons for the withdrawal of service provision from certain locations, and perhaps many reasons why it cannot be reinstated. However, it is important in the first instance that we are made privy to that information on a regular basis. It would allow us, as Members of Parliament, and others to pursue the Post Office on the activities that it is undertaking to restore services. For example, I have asked for the extension of the mobile service from elsewhere in my constituency into that area, but to date have not been successful.
There is nothing in the Bill that will cause the more than 900 Bankfoots to regain their post offices, but the provision of the information will allow for a level of focus and engagement that might—just might—lead to a better, and possibly quicker, solution for villages just like Bankfoot. I cannot see the amendment being particularly onerous for the Post Office, as I imagine that the information could be easily abstracted from that which the company already holds on file. None of the amendments on gathering additional information places a particular burden on anyone.

Edward Davey: The hon. Gentleman and other Members have talked about the information that Post Office Ltd already has on file. Presumably the hon. Gentleman can tell the Committee that he has consulted with Post Office Ltd about such information.

Gordon Banks: No I cannot, but can the Minister tell me that Post Office Ltd does not know where it should be providing post offices? I shall sit down if he wants to answer—[ Interruption. ] No, he does not. I was going on to say that I cannot see why the Minister might object to the amendments. He has disappointed me with his responses to our very reasonable amendments over the past few weeks. I hope that he changes his ways and sees the light in respect of this group of amendments, because they are reasonable and provide for a level of information that would help everyone deliver a better service for post offices in our communities.
Amendment 36, which is similar to amendment 33, calls for the inclusion of the number of post office services that have ceased to be delivered since the last report, and a list of their locations, and also the reasons for that service reduction. It would give us information not only on the numbers, which I acknowledge might already be available in some form, but the locations. That would be more easily done by Post Office Ltd, and would complete a level of information that should be forthcoming to ensure transparency. It is different from amendment 33 in that it deals with the change between one year’s report and the next, and not with locations that have a historical delivery problem.
Amendment 36 proposes the inclusion of the reasons for any service reduction since the previous year’s report. Reduction could be for a range of reasons, as I have already mentioned, but whatever those reasons it would be appropriate and beneficial, particularly to communities and community activists, for them to be included in the report as, I feel, Post Office Ltd already holds the information, and therefore there is little or no burden on it as a business. Whenever there has been a closure in my constituency, Post Office Ltd has been able to tell me why. Recently information arrived on my desk telling me very soon after the event that structural damage caused by some potentially criminal activity meant that the postal services in Coalsnaughton would not be available for a time. That is proof that Post Office Ltd already has the data, and we would like to see it accumulated in the annual report.
Amendment 37 would create an obligation on the Post Office to include in its annual report the number and identities of locations receiving mobile provision. Those of us in rural constituencies have experience of mobile provision, and the amendment would be useful as it would make it possible to monitor the growth, or the demise, of mobile provision, and individuals and Members of Parliament would be empowered by that information.
As Members of Parliament we work in silos, known as constituencies, and we should not—and do not—expect Post Office Ltd to do the same. I have in the past requested that Bankfoot—referring back to it—be serviced by a mobile provision, extending the provision into three locations in my constituency. I have been told that that is not possible due to the resources of the provision facility. What I am not aware of, because Post Office does not work in silos, is exactly where the mobile provision that serves my constituency also serves someone else’s constituency or other people’s constituencies.

Nia Griffith: Has my hon. Friend experienced the frustration of the fact that there does not seem to be enough of such mobile services available? Unfortunately, two categories do not seem to qualify. The first is where there simply is no provision, and the second is a busy post office in a relatively deprived urban area, where I am told that the volume of customers is too high to provide a mobile service. We have an irony: neither the remote rural area nor the high-volume post office in an urban area can access the mobile service. It would be nice to see a substantial increase in the number of those services available.

Gordon Banks: I wholeheartedly agree. There have been examples in my constituency where the mobile provision has not been available because the van—“the van”—has broken down, and there was no replacement van; I think the hon. Member for Angus may be able to confirm that. That problem has now been addressed, and there is some degree of stand-by and back-up facility service now. However, that is not to undervalue the possibility of a couple of knock-on issues occurring where services could be reduced because there is still a lack of facility, availability and volume of such services.
My hon. Friend the Member for Llanelli also made the point about locations that are too busy for a post office van. A post office van works to a timetable. It goes from one place to another, and it has to be there at 11.30. If that time becomes 12.15 because it was busy somewhere else, that would drive down the usage of post office services. The general thrust of the argument is that it would be hugely important and empowering to us as Members of Parliament, and to the wider public, to know the extent and spread of mobile service provision.
I mentioned the reasons why the mobile network could not be extended to Bankfoot. I am not for a minute doubting the accuracy of what I have been told, but it would be very useful and empowering for me to be furnished with the accurate data in the form of an annual report that reinforced the decisions that have been made in this case. That allows a level of transparency and scrutiny that Post Office Ltd and the Minister should not be too worried about. It will allow us to monitor whether the level of provision through such means is growing or shrinking. That is important. While the mobile service is better than no service, if we gave communities and MPs an opportunity, they would say that they would much rather have a full-time, fixed and static service. However, we recognise the challenges that face the network, and we recognise that once a lot of our constituents have crossed the threshold into a mobile service, they embrace it in a positive way. It may not necessarily be what we are used to, and there may be change, but not all change is bad. As long as it keeps delivering services into areas, I am sure that the people of Bankfoot will be happy to have a post office van turn up on Tuesdays and Thursdays so they can do their business.
The longer we have locations, such as the 900 that have been mentioned, that are without services, the easier it is for people to do their business elsewhere. They will have to do their post office business in another post office, but they can buy stamps and whatever else they might have bought from the post office, such as envelopes, from Tesco. They can get into the habit of not visiting the post office. The amendments are important for us to understand the changes to the network, and do everything that we can to keep those communities that do not have a post office interested in having one.
Amendment 38 sits perfectly with other amendments in the group, particularly amendment 36 which, among other things, focuses on the reasons for the service demise. Amendment 38 would add information on those locations identified in amendment 36, by informing through the report the steps that Post Office Ltd was undertaking to address any service reduction.
That information is undoubtedly available to Post Office Ltd. I alluded to an example in Coalsnaughton in my constituency, where a letter arrived on my desk telling me why there was a break in service provision. There was another instance last year in Tillicoultry where Post Office Ltd provided me with the reasons for the service break. Such information is well known to Post Office Ltd, and it will know what it is doing to address the break in the service provision. If it is aware of that, it is appropriate for us as Members of Parliament to know what is being done to address service provision, without having to chase the matter up and ask for an answer.
We must be totally aware of the processes used by Post Office Ltd. For example, if I call our local retail office to ask what is being done to improve services in Tillicoultry or Bankfoot, it will tell me there and then what is being done. Next week that might be different; option 1 moves to option 2, 3 or 4, and it would be good for us to fully understand what Post Office Ltd does to replace those services. That is the level of information that could come out through the report.
Amendment 48 would introduce new paragraph (d) to subsection (2). It seeks to establish the level of utilisation from the universal service provider, who, for want of a better explanation at this point, we shall call Royal Mail, and any changes to that level over the previous year’s report.
Information has been bandied about concerning the value of the footfall and the revenue that Post Office Ltd receives through Royal Mail business. Post Office Ltd must have that information on record, and it would be appropriate for it to be included annually in the Post Office report. That would allow us to see the level of change, and whether a third becomes a quarter or 40%. As we move forward into a possibly uncertain time in universal service provision, it would be a valuable measure or barometer to see the impact of the legislation, and measure that against the business that Post Office Ltd is enjoying in the future as a result of universal service provision or provisions.
Finally, amendment 49 would change subsection (3)(c) from “small businesses” to “small and medium businesses.” It should probably say “small and medium-sized businesses”, but it does not. We argue that that would be a useful extension to the report to ensure that accessibility of medium-sized businesses to the post office network becomes a requirement of the annual report.
It is important that we focus on medium-sized businesses as they will have a responsibility and an opportunity to access many of the services that Post Office Ltd currently offers and, possibly more importantly, the whole range of services that it and perhaps the Minister hope it will be able to offer in the future.
I will leave the definition of “medium-sized business” to Ministers in BIS; I would be happy to accept their definition. However, there are many medium-sized businesses. By the nature of their business or the products that they may be marketing or manufacturing, a medium-sized business might look very much like a small business. The categorisation depends on the measure used—turnover or the number of people employed. Therefore, it is important that we understand that businesses of all sizes have the potential to use post office services. We should be trying to encourage and monitor that. I will not place the burden on the Minister or Post Office Ltd to apply that to all businesses. We will leave large businesses out of the amendment, but it would be valuable to include the impact of medium-sized businesses in the report, as the amendment states.
My hon. Friend the Member for Llanelli and I believe that our amendments and those tabled by the hon. Member for Angus would provide significantly better information in a readily accessible and understandable format—a format that already basically exists. I would argue that, if not all, the lion’s share of the information that we want to be included in this section already exists—it is already known within Post Office Ltd—and that the Minister and Post Office Ltd may well find this batch of amendments helpful as they go forward. I genuinely hope that the Minister can accept them in the constructive and informative spirit in which they are offered. They are offered to allow Members of Parliament and the public to have a better understanding of the post office network, and what Post Office Ltd is doing to reinstate services in their area. Also, members of the public may engage in a relationship with Post Office Ltd which possibly does not exist at this time.
As we are including clause stand part in this debate, I want to ask the Minister about a couple of issues that have been touched on but in slightly different ways. The first question is about the reference in the clause to “the company’s post offices”. We assumed in our amendment that the report would not include mobile services. Perhaps the Minister might specify when looking at the amendment whether the report that is required by the Bill would include mobile services. If it did, that would be as good as accepting the amendment.
Finally, on the publication of the report and whether it gathers dust or we are able to do something constructive with it, I would support calls for an annual debate on the issue. I was going to be a little bit more conciliatory—[Interruption.] The Minister sniggers, but I was. I was going to suggest a Westminster Hall debate, if that would have been appropriate. [Interruption.] It would be better if that debate was held in the main Chamber, but I can understand that, possibly due to pressures of time and so on, such a debate may not always be available. Westminster Hall is a vehicle that is used for Government responses to reports, so the Minister might be able to accept a debate there, whereas he may not be able to accept the thrust of the arguments advanced by my hon. Friend the Member for Llanelli and the hon. Member for Angus.
The amendments are reasonable. They are intended to allow the gathering of information and to allow transparency and scrutiny into the post office network. As we move into an uncharted time in relation to Royal Mail and Post Office Ltd, the level of information asked for is not unreasonable. It would be empowering to us as Members of Parliament and to Post Office Ltd, eventually, if we were able to see the engagement that we would be able to have and, I hope, the benefits that the information would deliver to post office service delivery in our constituencies.
I look forward to the Minister’s being quick and saying yes, yes, yes, so that we can all get away by 10.25 am.

Karl Turner: I support amendments 33, 36 to 38, 48 and 49, tabled in the name of my hon. Friends the Members for Llanelli and for Ochil and South Perthshire. I am well aware that the Minister wants to make progress, so I do not intend to over-labour the points made by my hon. Friend the Member for Ochil and South Perthshire, but it is important to go through the amendments to emphasise the strength that they offer the Bill.
I welcome the clause. I fully endorse legislation that obliges a privatised Post Office to send the Secretary of State a report on its network each year.

Edward Davey: Can I confirm that it is not a privatised Post Office? I do not know if that is the Labour party’s policy now, but my party’s policy is to keep the Post Office either 100% in Crown ownership or to mutualise it. There is no such thing as a privatised Post Office, unless that is old Labour new policy.

Karl Turner: I accept that I made a mistake. It is fairly mutual; I understand that.
It seems only right that the post office network is transparent. In my view, more robust legislation would guarantee that such information is easily accessible, comprehensive and relevant.
The Bill includes the number and location of post offices, postal services, services provided under arrangements with a Government Department and other services that are provided at those post offices, and the accessibility of those post offices to users. The report would also provide specific accessibility information regarding individuals in rural areas, urban areas, small businesses, and individuals who are disadvantaged, are on low incomes, have disabilities or are elderly. That is welcome. However, given that the Government are intent on full privatisation, the clause must ensure more robust and targeted transparency. The report must highlight and examine more in-depth issues.
The amendments provide for a situation whereby both parliamentarians and the public have easy access to information on how a privatised Royal Mail is affecting the post office network, thereby providing more effective transparency and making possible full scrutiny.
Amendment 33 calls for
“the locations where post office services are at the time of the report not being provided but which are identified in the Post Office plan as outlet locations.”

The Chair adjourned the Committee without Question put (Standing Order No. 88).

Adjourned till this day at One o’clock.